Money for nothing: Get what you're owed from the taxman
With first-time refunds averaging just under €900, it could be the easiest cash you'll ever make, writes Charlie Weston
IF you want to be a Clever Carol or Switch-on Sean and save some extra cash, then getting money from the taxman is one of the most savvy and satisfying ways to do this.
Most PAYE (pay as you earn) workers in the country would be eligible to claim at least something back from Revenue if they have never done so before, according to Barry Flanagan, senior tax manager at Taxback.com.
"Refunds we have processed range from the hundreds to the thousands, with the average coming in at somewhere around €880 for first-time claimants," he said.
"That's a good chunk of change by anyone's standards - and given that it usually takes people under an hour of their time to cobble together the necessary receipts and fill out the relevant documentation - it's probably the easiest money you'll ever make."
So what can you claim back?
There are changes to tax reliefs every year in the Budget, but when you're looking at your tax refund entitlements you must remember that you can go back four years.
It may sound too good to be true but it's not, Mr Flanagan said.
If you are an Irish taxpayer who has paid medical expenses over the last four years - on anyone's behalf - then you may be entitled to a refund, he said.
And that's just one of the categories for which you may be able to claim.
The three main reliefs have changed in the last few years, but can still be claimed:
l For medical expenses, relief at 20pc is still available and can be claimed on most unreimbursed expenses incurred, and on qualifying non-routine dental expenses.
l Many people wrongly believe that the Home Carer Tax Credit is for those caring for other people's children, the elderly or disabled people. They don't realise that it can be claimed where any housewife or house-husband works in the home, caring for their own children. And with the increase from €810 to €1,000 in 2016, this credit is more valuable than ever. It is available to any jointly assessed couple with one or more child, where the non-assessable spouse has income of less than €7,000 in 2016, Mr Flanagan says.
l The tax credit for tuition fees is still available. For 2015, the relief does not apply to the first €3,000 of qualifying fees paid. Similarly, for part-time courses the first €1,500 is disregarded in respect of each claim. As the 'Student Contribution' falls under the definition of "tuition fees" it means that any family with more than one child in college at the same time will usually qualify for a tax refund. Similarly, those paying higher fees in private colleges, above the €3,000 limit, will often qualify for a valuable credit of up to €800, even where there is only one child in college.
Overpaid tax is also an area which results in many people receiving much welcomed refunds from the Revenue. This can occur inadvertently, especially if you have changed employment during the year.
Individuals should look back on their income levy and USC (universal social contribution) payments to ensure that they have not overpaid such payments in prior years and should claim a refund before it's too late.
The Taxback.com expert said he deals with people every day who have paid too much in tax, some simply because they haven't applied for the refunds they are entitled to, and others because perhaps they were on emergency tax with an employer and they didn't realise, or they only worked in the country for part of the year and so are due a tax refund.
Some other reasons that people might be owed money from the taxman include:
l Flat-rate expenses: an even greater number of PAYE workers do not know about the flat-rate expense deduction that can be made on their tax bill. Most employees are unaware that they can be reimbursed for any expenses incurred wholly, exclusively and necessarily in the performance of their duties of employment (though not expenses incurred travelling to and from their normal place of work). Mr Flanagan said in his experience, less than 10pc of PAYE workers are aware (especially if they are not part of a union) that there are additional allowances available to people engaged in certain trades and professions - and so they may are missing out on this "free money" as a result. The reason that these allowances have kept such a low profile is not really known but we are trying to highlight the issue now so that people can get what they are owed.
l Standard flat-rate expense allowances are set for various classes of employee. For example, shop workers are granted flat-rate expenses of €121 per year and bar trade employees get €97 per annum. Nurses who supply and launder their own uniforms can claim a deduction of €733. And deductions are available to doctors, engineers, plumbers, journalists, teachers and hospitality sector workers such as barmen/women, waiters and waitresses, porters and hotel managers. The amount of the deduction is agreed between Revenue and representatives of groups or classes of employees (usually the employees are represented by trade union officials - which is why non-union members may not have heard of these).
The agreed deduction can then be applied to all employees of the class or group in question, but Revenue won't give it to you automatically. You have to claim it.
Other tax reliefs and incentives which have remained available are:
l Rent a room relief.
l Employment and Investment Incentive (EII) scheme.
l Capital losses are still allowable.
So what are you waiting for? Get your PPS (personal public service) number, gather a few receipts, sign a form or two, wait two to six weeks - and there you have it - money for nothing.